May 1st 2009

By John Driscoll

The Times-Standard

May 1, 2009

The Humboldt Redwood Co. will lay off 30 of its forestry staff and cut back on logging due to continued weakness in the wood products industry.

Humboldt Redwood CEO Richard Higgenbottom said seven of those positions will be permanently cut, while the remainder are expected to be rehired within 18 months.

”If the economy improves and sales improve, we'll bring people back earlier,” Higgenbottom said.

The company's sister operation, Mendocino Redwood Co., also announced layoffs of a similar scale.

Both companies will reduce the amount of logging they plan to do over the next two years in an effort to reduce log inventory to balance it with slow sales. Humboldt Redwood owns 200,000 acres and Mendocino Redwood owns 228,000 acres.

The sawmills in Scotia and Ukiah are continuing to run as needed with periodic downtime, Higgenbottom said.

The decision was announced to workers at meetings Thursday morning.

The cutbacks are the most recent in the local timber industry, and come only nine months after Mendocino Redwood took over the old Pacific Lumber Co., which went bankrupt in January 2007. Humboldt Redwood has made several operational and staffing changes since it took over.

Mills around the country have also made significant cuts in their work forces and have shut mills at an alarming rate after housing starts crashed and remain weak. Redwood is generally used in remodeling projects, which have also been in a slump.

The Leading Indicator of Remodeling Acitvity put out this month by Harvard's Joint Center for Housing Studies did not paint a bright picture for the recovery of the industry. The report found homeowner improvement spending is down, and even with reduced financing costs, it is unlikely to climb without a boost in consumer confidence.

Although mills can cut back production of lumber to respond to decreases in demand, Humboldt Redwood and Mendocino Redwood are taking the more unusual step of scaling back logging activities.

California Forestry Association spokesman Bob Mion said that because timber harvest plans are only good for three years, there is limited flexibility to cut back on logging. If a logging plan expires, he said, it needs to be filed again, often at a cost of tens of thousands of dollars.

”That's a huge gamble,” Mion said.

Green Diamond Resource Co. in March laid off 28 forestry workers in anticipation of reducing harvesting on its 450,000 acres.

John Driscoll can be reached at 441-0504 or jdriscoll@times-standard.com.